Fishing quotas - Scottish additional quota allocation from 2024: consultation

Section 2 - Background On Quota Distribution

We understand that the system for distributing sea fish quota can be complex and in this section we provide background information to help inform your response, along with a short review of how AQ has been distributed in the period 2021-2023.

Most of the UK’s fish quotas are fixed following the conclusion of annual negotiations with other coastal states. The UK’s share of quota opportunities is then set by the Secretary State and published in a Determination document^[4]. Following this, the UK’s quota is apportioned between the UK Fisheries Administrations in line with the UK Quota Management Rules^[5] and the Scottish Government then allocates quota to Scottish administered vessels in line with the Scottish Quota Management Rules^[6].

Though fisheries management is devolved, particularly in relation to sea fisheries quota, there is a significant UK element. Working within the UK system provides flexibility and allows fishing businesses to move fish quota to where it is needed. The pan-UK element of quota management is important to bear in mind when considering amendments to the quota management system.

To Note: The Scottish Government aims to ensure fishing communities retain their fishing rights, which are a national asset. The Scottish Government does not charge/require payment for access to fishing opportunities, all quotas are distributed free of charge. Any exchange of money takes place separate to Government.

The Fixed Quota Allocation (FQA) System

The UK Government apportions the majority of sea fish quota that the UK receives, based on FQA shares, as set out in the UK Quota Management Rules. The apportionment methodology is based on the FQA units linked with each licence.

FQA units were distributed to UK fishing licence holders in 1999, based on recorded landings between a 1994-1996 reference period (except for licences for 10 metre and under non-sector vessels). Each FQA unit provides for a share of the UK’s annual quota for the corresponding fish stock.

Historical Allocation of Fishing Opportunities Outside the FQA System - Quota Management Powers

There have been occasions when the Scottish Government allocated a share of quota differently, particularly to allow additional opportunities for small scale fishers (e.g., the Scottish under 10 metre handline mackerel fishery), however the vast majority of Scottish quota has been allocated based on FQA holdings.

Allocating Additional Quota Differently (2021 to Date)

Since its withdrawal from the EU, the UK now receives a higher share of the Total Allowable Catch (TAC) for some fish stocks, and in a few instances, quotas for which it previously had no share or access.

However, it is commonly accepted that the AQ arising from the UK’s withdrawal from the EU is not what had been expected by many in the fishing industry.

For the majority of stocks of high importance to Scotland we did not see the significant increase in share that was anticipated (though with some exceptions, such as mackerel).

Maintaining The FQA System for Scottish Existing Quota (EQ)

The FQA system has helped provide economic stability and certainty since its introduction. The Scottish Government does not currently propose any change to the allocation of Scotland’s EQ share - EQ will continue to be allocated primarily via FQA holdings as per the current UK and Scottish Quota Management Rules.

The Scottish Government committed to maintaining the FQA system as the means of allocating Scottish EQ as part of our Future Fisheries Strategy body of work.

We define EQ as: the share of the TAC received by the UK under the Common Fisheries Policy’s relative stability key, plus quota regularly gained due to invocation of Hague Preference^[7].

Additional Quota

“Additional Quota” (AQ) is defined as any quota greater than the UK’s EQ share.

The Scottish Government recognises two sources of AQ:

(i) Quota which represents the increased amount of the UK’s permanent share of quota following EU exit. That is: the change in the share of quota assigned to the UK as an independent Coastal State.

(ii) Gains from transfers of quota to the UK from other Coastal States (for example, transfers of quota from other Coastal States for access to UK waters). These transfers will arise through yearly negotiations, are not permanent, and may fluctuate from year to year.

The Scottish Government may allocate the AQ arising from these two sources differently.

Scottish Additional Quota

The Scottish Government, like other Fisheries Administrations, recognises that AQ is distinct from the share of quota which the UK received while a Member State of the EU.

In the FFM Discussion Document, we set out a proposal that at least 50% of Scotland’s AQ should be distributed via mechanism other than FQA units^[8]. The subsequent FFM Policy Intent Paper stated that options for allocating AQ differently should be developed with stakeholders. This included a focus on the active Scottish fishing fleet.

Following the 2020 consultation, which saw a strong rejection by most respondents of allocating AQ via FQA units. Scotland has allocated 100% of its AQ using an allocation mechanism other than FQA units so as to target quota to active Scottish vessels and non-sector vessels only.

Guiding Principles and Statutory Obligations

Fish stocks are a public resource and a national asset. The economic and social benefits that flow from fishing should be shared widely across the nation (in line with the national benefit objective set out in the Fisheries Act 2020 and as discussed in the Joint Fisheries Statement (JFS)).

Section 2.2 of the JFS sets out how the objectives of the Fisheries Act 2020 should be applied. Section 2.3 of the JFS, sets out the Objectives of the Fisheries Act 2020 that are engaged in the distribution of fishing opportunities.

Of most direct relevance for how sea fish quota should be distributed are the provisions within section 25 of the Fisheries Act 2020 and the JFS (in particular sections 4.2.1.27 - 4.2.1.30). In line with the Fisheries Act 2020, AQ will be distributed based on criteria that:

• Are transparent and objective; and
• Include criteria relating to environmental, social and economic factors.

Additionally, national fisheries authorities must also seek to incentivise the use of selective fishing gear, and the use of techniques that have a reduced impact on the environment.

Review of 2021-23

For 2021-2023, we allocated AQ via two mechanisms:

• The greater share of AQ was allocated based on historic track record (HTR) of vessels in the period 2015-2019
• The remainder was allocated to non-sector vessels (predominantly 10 metre and under non-sector vessels).

In allocating this quota our key aims were that it should:

• Be consistent with the Scottish Government’s Fisheries Management Strategy and Blue Economy Action Plan.
• Support the active fishing fleet and help reduce their business costs.
• Help businesses with diversification of fishing operations through access to fishing opportunities.

Through allocating via HTR, the Marine Directorate was able to target allocation at those active fishing businesses which had a record of catching the relevant fish. This helped support vessels within the active fleet without a FQA share that corresponds with their previous fish landings, as it reduced the need for those vessels to lease quota in order to continue to fish in line with previous practice. In discussions with catching sector representatives, there has been broad support for this allocation model and its success in reducing costs to parts of the active fleet.

A shortcoming of the HTR methodology is that it does not offer quota to new entrants to the industry, i.e., vessel owners with no, or only limited, possibility to acquire FQA units and with no fishing activity during the reference period for the creation of a HTR.

A possible solution to this would be to move from a fixed reference period, for calculating a vessel’s HTR, to a rolling reference period. This would mean that new entrants to the active fleet would slowly generate a full HTR after a period of five years (on the assumption that the reference period would continue to cover five years).

Allocating to the non-sector

Since 2021 Special Allocations for a number of stocks have been made from Scotland’s share of AQ to the 10 meter and under group. A smaller number were made to the over 10 metre group.

The AQ Special Allocations (2021-22) made to the 10 meter and under group and total landings can be found in Tables 5 & 6 of the data annex.

A comparison between the allocation and the landings made shows that for a number of stocks the level of the Special Allocation is adequate and provides scope for some further growth in utilisation. For example, North Sea saithe and skate/ray.

For the following stocks the low use of the Special Allocation is worth consideration for a decrease or removal: North Sea ling & anglerfish and Western ling & skate/ray.

It is evident that the Special Allocations for Mackerel and North Sea cod may require to be increased.